How Your Tax Return Can Help You Save Money

Few things can make dark storm clouds roll over your mood like the advent of tax season. But there is a silver lining to this stormy season of paperwork and payments: Getting a tax return! After all this work, it’s nice to get a little something back. But it begs the question: How can you put your return to good use? Sure, you could pay spend it, but what if it could save you money?

That’s what we think you should do at Hacker Accounting. Don’t splurge your return: Save it! There are several ways that your tax return can help you save money. Consider investing in one of these options to make your financial future more secure.

Pay Down Debt

It can be hard to save money when you’ve got debts to pay off. If you get a good tax return, consider using it to help pay down your debts. The sooner you get yourself out from under your debt obligations the sooner you’ll be able to really build up your savings.

Savings

A smart thing to do with your tax return is to put it all in your savings. You never know when you’ll need that money. Having a good chunk of savings on hand can do you a world of good should you need emergency funds, fulfill a life goal like buying a house or boosting your kids’ college funds.

Boost Your IRA

Your tax return can also be a boon for your retirement accounts. Investing that tax return into your IRA could pay off big time in the long run, as interest accumulates over the years.

Education

Sometimes the best way to save money is to spend it. Invest in yourself by taking a class in something that will help gain you more financial security. Enrich yourself as a person. It may cost you a bit at first, but in the long run you could learn skills and gain insights that could save you a lot of money.

Home Improvement

Is your home insulated? If it’s not, you could be spending way more money than you need to on your energy bills. Adding insulation can save energy, which will lower your bills. You could also renovate your home by improving rooms or adding in additions that will boost your home’s curb appeal and increase your home’s resale value.

Pay Your Taxes

You could also use your return to pay off next year’s taxes. This is a smart move for independent contractors, who have to pay quarterly taxes. By holding this money in reserve, you can pay off your tax payments as they come up while leaving the rest of your money free to do with as you will.

Chris has been working in the bookkeeping and accounting field for over 15 years preparing business, income and payroll taxes. Chris has a bachelor’s degree from Arizona State and is an Enrolled Agent with the Internal Revenue Service.